Also, evictions are rising in HUD-assisted housing.
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A survey by the House Financial Services Committee found private equity homeownership has been growing faster than was previously known. The survey of the 5 largest single family home rental companies (Invitation Homes, American Homes 4 Rent, Cerberus Capital Management, Pretium Partners and Amherst Residential) found they had gained a combined 76,235 homes between March 2018 and September 2021, as their stock grew 27%. And when the companies sold those homes, 61% of them went to other institutional investors. Only .5% of homes were sold to tenants.
How were they able to make these purchases? By leveraging debt through financial instruments rather than taking out mortgages, they had a huge advantage over aspiring homeowners facing a tight credit market.
The purchases were mostly in low-income neighborhoods which were disproportionately Black; specifically, an average 40% Black population in the 20 zip codes with the most acquisitions. The neighborhoods also had 30% more single mothers than the national average. The companies are squeezing tenants, whose fees increased 40% between 2018 and 2022. The number of tenants in rental arrears jumped from 10% in 2018 to 20% in 2021.
This adds to previous research on corporate homeownership, including a study of Atlanta that found larger landlords were 68% more likely to file for eviction and a study of Boston found that landlords accounted for 45% of evictions despite owning 0.5% of homes. In other parts of the country, private equity is quickly becoming the dominant form of homeownership: A single corporate landlord is now the third-largest owner in Omaha, Nebraska, a report from the Flatwater Free Press found. In Nebraska and elsewhere nonprofits and community land trusts are trying to beat back the tide, but the congressional report demonstrates that state and federal …….